Critics of current method say fee structure doesn’t match needs
After voting just three weeks ago to create a uniform affordable housing linkage fee for the entire county, Gunnison County commissioners may refigure the fee formula again. At their work session on March 25, commissioners heard community members and area planning officials say the current formula does not adequately address the actual housing needs for specific areas in the county or its affordability. Read More »
Same fee for entire county
The Gunnison Board of County Commissioners moved Tuesday, March 4 to make the housing linkage fee uniform throughout Gunnison County. The change in linkage fee rules means the county will no longer have two districts that pay different linkage fee amounts, and Crested Butte area builders will likely pay less.
By Mark Reaman
The Gunnison Watershed School District board hopes to be able to approve at least a statement of direction at its May 20 meeting for how to deal with its staff housing situation. The district, like many major employers in Gunnison County, is finding it difficult to recruit teachers and other staff to take jobs because of the difficulty of finding adequate housing in the Valley.
While not yet ready to support a detailed proposal for how to solve the housing gap, the board members all seem ready to give the reins to district superintendent Leslie Nichols to research potential partnerships and opportunities for future housing.
Earlier this spring the board had a lengthy discussion over a somewhat detailed analysis provided them by Nichols and affordable housing expert Willa Williford. The board was somewhat hesitant to adopt a detailed plan given their lack of knowledge of the broader housing picture, coupled with uncertainty of funding sources and some pushback from existing teachers and staff who voiced displeasure that it wasn’t fair for the district to subsidize housing for new workers and concern that spending money on housing might negatively impact the ability of the district to provide higher wages.
At the May 6 meeting, Nichols provided a pared down one-page summary addressing the housing situation. “After the previous discussion I pulled together a synthesized plan for the board to consider,” said Nichols. “The one-page provides the basic parameters about the general beliefs we’ve expressed as a district. I think we all agree we need staff to run our schools.”
The document stated the problem the district was having in terms of housing being available for staff throughout the Valley but made clear it was not yet at a point to establish firm goals regarding the number of units to develop or a specific timeline for development “because adequate funding solutions do not currently exist.” The document emphasized also that the district would “not develop an employee housing program that impairs its abilities to pay employees the best salaries it possibly can.”
The proposal suggested an employee rental program would be self-sustaining and the district would “not seek to incur further debt through bond funding during at least the next ten years.”
Nichols wrote about the need to proceed with caution.
“The housing pressures in the valley are real and it affects our ability to recruit staff. There are not enough houses in the valley,” said Nichols. “We are a large employer with an interest in finding solutions to housing our employees.”
Nichols again emphasized there is no intent to have housing costs impact the district‘s ability to pay employees better or take away from operating funds. She indicated she was hesitant to go further into debt in the near future for housing and said since the district owned two housing units for staff in Crested Butte, the next priority should be for Gunnison units.
“It’s a good start,” said board member Mark VanderVeer. “I am a little leery to definitively say the district shouldn’t take on debt. I think you might have to, so it should stay an option. Ruling out debt for ten years is a long time. The challenge is finding a price point that teachers are willing to pay.”
VanderVeer said while the ideal would be for staff to pay around $1500 per month, that might not be possible given market realities.
Mobile home opportunity?
Board member Mandy Roberts said she did some personal investigation and reached out to Gunnison County officials about somehow partnering with one of their upcoming projects. She also said she talked to the developer of the former Frontierland mobile home park who is renovating the park in Gunnison. She said Mike Carnes told her he is willing to consider selling the school district 10 two-bedroom/two-bath mobile homes for about $150,000 or less each plus the cost of monthly land rental. Roberts suggested the board consider taking $1.5 million of the district’s $4 million capital reserves and look into buying ten units that could be put to use before the start of the 2024/25 school year.
“They are solar and electric-ready and this seems like such an amazing price for a new home,” Roberts said. “I am extremely excited at the idea of obtaining housing before the next school year. At the same time, I think we should then consider providing bonuses for existing staff over the next five years with some of the rest of the money in the reserves.”
She suggested perhaps awarding $1,000 per employee per year in an effort to retain staff while keeping about $1 million in the reserve fund as a cushion.
Nichols and the rest of the board said the idea was worth pursuing and Roberts will check-in with Nichols to vet the information and find out further details. “We would have to a lot of due diligence on the value of mobile homes and the arrangement for the land lease. But it is an interesting option,” said Nichols.
“As much as the board has received a lot of letters from teachers and staff which think we shouldn’t be pursuing this, we have to take the longer view,” VanderVeer said. “That view is that part of our role is to make sure we have the ability to hire teachers in the future. That may not be 100% supported by everyone but we need to be in a place to work toward solving the problem. Sometimes everyone wants grandiose solutions, but small step opportunities can sometimes be better.”
VanderVeer said he wanted Nichols to be part of the community housing conversations and potential solutions. “That’s the right direction in my mind even if not everyone likes it,” he said.
‘Twenty years ago, none of the big employers in the Gunnison Valley had to be in the housing business,” said Nichols. “We aren’t doing this because we love our new employees more than we love our old employees. We’re doing this because our job is to educate kids and if we’re going to have professionals in the classroom, this may be the length we need to go to make that happen. We love the existing staff. When the current staff leaves, we need to be able to bring in new staff to replace them. The conditions are different now than when the existing staff came in.”
Board president Tyler Martineau said he agreed with VanderVeer that the district shouldn’t automatically rule out seeking bond funds in the next ten years. ”Why should we bind future boards,” he asked. “I don’t mind expressing caution over the move but don’t want to rule it out completely.”
Martineau also said that while the district has two housing units in Crested Butte, he doesn’t want to take off the table the option to do more in the North Valley if the right opportunity should arise in Crested Butte before Gunnison.
“I am in favor of adopting this statement but don’t consider it a plan,” added Martineau. “A plan to me is a much more comprehensive document. I think it would throw people for a loop when they see the word plan. This doesn’t really do it for me. We were on the route to doing that with Willa’s work. It is more in the nature of a housing statement or direction.”
Board member Jody Coleman said she was comfortable with the direction. “We need to authorize you (Nichols) to engage in the housing conversations in the community,” she said.
“We need to get going on this and keep the conversations going,” said Roberts.
VanderVeer said he would like some acknowledgment of the funding needs. “It doesn’t have to be specific at this point but maybe a range of what might be expected,” he said. “It wouldn’t be a monetary commitment at this point.”
“It is important to recruit but also retain staff,” reiterated Roberts. “Hopefully we can obtain ten units by fall with no added debt to the district. That seems like common sense to me.”
Nichols said she agreed retaining staff was as important as recruiting new employees.
“The bottom line is that we are instructing the superintendent to proceed with researching possible partnerships and funding solutions for employee housing development,” concluded Martineau. He said that down the line the district would have to recognize the details of the when and how it all works in an equitable fashion.
“We have existing policies for that,” assured Nichols.
Nichols said she would take the most recent board feedback and recraft the district’s statement and present it to the board at the next meeting.
“Hopefully we get something at the May 20 meeting that we can all agree with,” said board member Anne Brookhart.
The rest of the board agreed.
By Kendra Walker
The Gunnison Watershed School District (GWSD) board continues to debate how to tackle housing for its teachers and staff and whether the district should get in the housing business in the Gunnison Valley. During their April 8 meeting, the school board reviewed a draft housing action plan presented by housing consultant Willa Williford, but failed to approve it based on varying understandings of what the plan entailed. The board requested more specific details, such as housing types and costs, to revisit the potential approval of the plan.
Williford has been working with the district for the past year to gather data and potential solutions for a high-level housing plan that would open the doors to providing housing to GWSD teachers and staff. The purpose is to set a proactive, five-year path to address housing challenges and have a framework to engage with prospective partners. The plan includes guiding principles for workforce housing, general goals regarding location, housing types and price points, priority funding sources and recommends pursuing partnerships with developers on and off land owned by the district.
Williford presented a draft of the housing plan in February that has since been shared with the community through a survey and at open houses for feedback.
She shared that the input received came mostly from parents and district staff, and that people were very familiar with the gap between employee wages and the cost of housing.
Williford explained that the majority of GWSD employee households fall under the $75,000 to $100,000 household income category. “That translates to that group being able to afford a home between $265,000 and just below $400,000,” she said. However, she said the median sale price of a home in the Gunnison Valley in 2023 was $827,500.
A 2023 employee housing needs assessment estimated there could be a need to hire 70-80 new GWSD employees through 2028. Superintendent Dr. Leslie Nichols estimated the district needs to fill 10-15 vacancies annually, but stressed the difficulty in recruiting new hires when there is no housing stock available.
The housing plan recommends the district pursue 15-20 new housing units and reserve $1.5 million from its capital fund for housing initiatives over the next five years. It also suggests the district transfer excess interest income and payment in lieu of taxes to the capital fund and request additional funds to support Career and Technical Education (CTE) programming for one-time, unreliable revenue streams.
Williford clarified that the funding sources would not take away from employee wages and raises in the general fund, which Nichols confirmed. “The money we’ve set aside for capital reserves is not in competition for the money we have for salaries.”
“So if we don’t have any money in the capital reserve that’s earmarked for this purpose then we’ll miss out on opportunities,” said board president Tyler Martineau. “I see this as a value without impacting our day-to-day commitments.”
Williford stressed the value of community partnerships, such as identifying property owners willing to provide district employees the opportunity to rent available units, and utilizing the districts’ CTE and Student Organization Achieving Results for Community (SOAR) programs for potential housing construction projects.
Board member Anne Brookhart made a motion to adopt the plan; however, it failed for lack of a second motion. Some members expressed their concern that the plan did not provide enough details needed to implement potential housing action by the district.
“For me the plan is a good starting point but not concrete enough for how it’s going to solve the problem,” said board member Mark Vanderveer. “It’s nothing against the plan, but it just doesn’t seem to have a full solution. We haven’t defined the dollars needed to build now, three years from now, five years from now. We haven’t defined the costs so we know what options are viable and what options are not.”
Nichols stressed that the housing action plan allows the district to have conversations with potential partners in the valley interested in working on housing opportunities and dive deeper into those types of questions and discussions.
“If this plan does indicate we have money in the capital reserve, I’d hate for us to be in the position to say sorry we can’t take advantage of that,” Martineau said. “I share your desire for more specificity in this plan,” he told Vanderveer, “but the reason I support adopting the plan is so if we find out six months from now there’s a partner out there, we have something in place that can get that process going.”
“This is a very complex problem and our community is really suffering with the lack of availability for housing,” said board member Jody Coleman. “I think the solution is going to come in partnerships and with the major employees in this valley…we must work together to provide affordable housing. I don’t know what it’s going to look like but I know we can’t just put our heads in the sand. I do think we need numbers to see what we can use to partner with and how many employees that could serve.”
The board asked Nichols to investigate more details around costs and types of housing. “With the land we have now available, what could be built there and at what cost? How many units could be built and how would we manage those? What’s the maximum number of units we could build with what we have now that would meet the needs?” said Vanderveer.
He also reiterated, “Unless the community as a whole figures out how to build additional housing at a reasonable price, this will not be solved.”
The board will revisit the housing action plan during a work session on April 22.
By Mark Reaman
While not being able to obtain as much capital as originally intended and thus not being able to construct as many units as originally thought, the Crested Butte town council agreed Monday to begin the steps to issue $10.1 million in debt to construct 17 units of affordable housing in Paradise Park and near the Gas Café over the next three years. A public hearing and second reading of an ordinance entering into a so-called Certificate of Participation (COP) will be held at the April 15 council meeting.
Before that hearing, the council also wants to see a financial analysis of why affordable housing construction costs are so much more in the North Valley. The project is expected to come in at about $550 per square foot while the county’s Sawtooth housing project is coming in at $340 per square foot.
The town’s vacant lots in those two areas would allow for 32 workforce housing units. Earlier this year the town had expected to be able to issue a $12 million, 20-year tax exempt bond that would pay for 20 units. Upon consultation with municipal finance firm Stifel Municipal Finance and bond counsel Butler Snow, the direction changed to instead pursue the COP. Crested Butte housing director Erin Ganser said the COP worked better as a financing mechanism given the significant interest rate increases over the last three years and it is not subject to state TABOR (Taxpayer Bill of Rights) restrictions.
Ganser also said that under the parameters set by voters in 2021, a bond could only borrow $8.9 million so the COP allows another $1.2 million in capital.
Under the COP, the town will be obligated to repay $600,000 annually for 30 years with an interest rate of 4.259%. If carried for the entire 30 years, that would result in a repayment of $18 million. But the town could refinance or consider selling some of the units after 10 years if interest rates improve. The loan would be guaranteed by offering town-owned property, like the town hall, as collateral. In a report to the council, Ganser said Gunnison County has used the COP financing mechanism successfully for several projects and, for example, the courthouse was used as the collateral.
Construction would take place over three years in two phases. The first phase would include nine units and is expected to be fully rented in 2025. The eight-unit phase two would be fully leased in 2026. Some general or capital fund money will also be needed to subsidize the early repayment before rents start coming in to help pay the debt. It is anticipated that rents will be in the 80% to 100% area median income (AMI) range. Ganser said that if the Town is successful in securing grant funds from the Department of Local Affairs, the units will have income restrictions at 140% AMI. When sold, the units would be targeted to members of the local workforce who earn 140% AMI and below.
“This approach produces the most housing units in the shortest period of time while preserving the town-owned land (that can accommodate 15 more units) as a resource for future development of deed restricted housing,” Ganser’s memo to the council concluded. “Additionally, assuming the sale of units over time, the total fiscal impacts are cash positive, and these units can be transitioned from rental to home ownership when the COP is refinanced or paid off.”
With the coming Mineral Point affordable housing apartment complex starting this year, the action will consume pretty much all of the town’s affordable housing budget so there will be no money for things like the Green Deed or Good Deed programs. This made some of the town council uncomfortable. Councilmember Kent Cowherd wanted to know the earliest the town could recoup some of its investment to perhaps fund the Green Deed-type programs. Ganser said it would be 10 years.
“I don’t like losing the ability to fund the Green Deed program and things we’ve talked about a lot,” said councilmember Jason MacMillan. “But I don’t see an alternative.”
“So, in 10 years we can relook at the interest rates and possibly refinance?” asked councilmember Gabi Prochaska. “The 30-year timeframe straps that money for a very long time. Hopefully we can sell some sooner.”
Ganser said depending on financial circumstances at the time, it would be possible after the first decade to have the town collateral released and some units could be sold.
Councilmember Mallika Magner expressed frustration with being “blindsided” by the rising cost of building such projects.
Mayor Ian Billick asked town staff to compile an analysis of the construction costs associated with the project. He noted the lower per square foot cost of the county’s Sawtooth housing project. “From a due diligence side, we should understand the costs. Is it regulatory? Is it because of the design,” he said.
“These are expensive units so I agree with that,” said councilmember Beth Goldstone. “At $10 million, that’s $588,000 per unit and more with the interest. That is a lot of money. I’m getting a lot of questions so that analysis would be helpful.”
Cowherd asked if there was any history of a COP failing and a town losing the collateral. Dalton Kelley of Butler Snow said it only happened once in an unusual circumstance in Sheridan, Wyoming in 1997.
Town attorney Karl Hanlon, who represents several other Colorado government entities, said the COP is as common as issuing bonds. “It is becoming the norm,” he said.
“The real question I see is the opportunity cost,” said Billick. “I don’t see us having a problem making the payments, but we are giving up other things like Green Deed. Something like the skatepark project we just did wouldn’t probably happen.”
Councilmember Anna Fenerty said the units would be expensive when sold and had concerns they wouldn’t really qualify as being affordable. Ganser had roughly projected the town could get $12 million for all 17 units if sold after 30 years.
“When they sell, the intention is that they would still be deed restricted,” said town manager Dara MacDonald.
Billick emphasized that the town would be subsidizing a financial gap no matter what in order to keep them affordable. “How much depends on interest rates and the numbers in 10 years,” he said.
Fenerty admitted she was somewhat “uncomfortable” with the situation since a future council could sell the units and they might not be affordable in 30 years.
A future council could indeed change the restrictions, admitted Ganser.
“We need to think about other projects like transit,” said MacMillan. “We have a lot of work to do that will take money.”
“It’s expensive but the housing situation is urgent,” said Billick. “It keeps the project moving and there is a premium for getting housing in the town. I don’t see us getting more units with the other mechanisms. I too wish interest rates were lower and construction costs were lower.”
“Not being flexible for 30 years gives me pause,” said Prochaska. “But to Anna’s point, at least if a future council sells them at, say, market rate, the money earned comes back to town.”
“The cost of the units in incredibly high but barring a way to bring down interest rates and construction costs this is the best alternative at the moment,” said Goldstone.
“The Fed keeps talking about lowering interest rates,” noted Magner.
“That is hard to predict,” responded Ganser. “And construction costs keep going up. Will waiting a month make a difference? Will a year make a difference?”
Council voted 6-1 to set a public hearing on the issue at the April 15 meeting. Fenerty voted against the motion. Billick reiterated his desire for council to have at least a draft analysis on the construction cost differentials before the public hearing and second reading of the ordinance.
By Katherine Nettles
Gunnison County signed a final agreement this month with a company in Buena Vista to provide 32 new affordable housing units for the south end of the Gunnison Valley, which could be complete as early as October of this year. County manager Matthew Birnie updated commissioners during their March 19 meeting that on March 7 he finalized the agreement with Fading West, a design, development, manufacturing, construction and property management company in Chaffee County for the Sawtooth phase II project. The modular apartment style building located near the Gunnison Fairgrounds will provide 32 units ranging from studios to two-bedroom apartments for a guaranteed maximum price of just over $11 million.
“That is very close to what we had anticipated originally,” said Birnie. “It crept up on us a bit, but not bad. And that ends up being just over $340 per square foot, which is a pretty damn good price in this market.”
Birnie confirmed that price is inclusive of all costs, including every unit, the site work, geothermal and solar. “So we’re very excited about that; that’s a locked in price,” he said.
Commissioner Jonathan Houck marveled at the low cost for the housing project’s second phase. “I want to highlight $340 per square foot including our energy efficiency priorities that we’re doing on our projects and we’re showing that they work at that residential level too,” he said.
Commissioner Laura Puckett Daniels asked if that included the full site work and finish landscaping and utility work. Birnie said it included all of those details up to when people move in.
“We’ve really developed a strong partnership with Fading West, and they’ve kind of evolved some of their practices,” said Birnie. He said they had not, for example, done geothermal before. In the county’s Sawtooth phase I project, which included 18 mostly deed-restricted townhomes and accessory dwellings, he said they used air-to-air heat pumps which was also new to Fading West. “We’re kind of co-innovating some of these in a modular space.”
Birnie said he was impressed with the framing and overall quality of the company’s work after having visited the factory.
“It’s the best quality framing I’ve ever seen, it’s not what folks think of when they think of manufactured housing,” he said. “These are homes. These are framed with 2 by 6 [inch] lumber, and the precision with which they are able to do things in that factory is pretty incredible, versus being outside in our environment.”
The most exciting element, continued Birnie, is the timeframe of less than six months from start to finish.
He said the application for city of Gunnison permits has been submitted, and the pre-application process with the city has been underway for a few months with no anticipated delays.
Production on the factory line in Buena Vista is scheduled to start in April and should be complete in mid-June, while site work is targeted to begin in early April. The units are scheduled to be brought in on trucks as stacked boxes starting the third week of June, and the siding will be installed on site. The goal is for October completion and move-in to begin shortly thereafter.
Houck said the modular building concept is helpful because the workforce in the Gunnison Valley is already quite busy. “So we would have to get in line with other projects,” he said of the prospect of building with local contractors. Birnie noted that the site work would be done by local workers, but “there’s no local framers looking for work around here.”
Funding for the future
Phase II will be the county’s first foray into retaining ownership of apartment-type units, said Birnie, and the county is completing the project with a $6 million loan from the general fund which will get paid back over time as the units earn rental income. All units in Phase II will be deed-restricted, with eligibility for residents earning a range of 80% to 120% of area median income (AMI) and up to 130% of AMI in some of the bigger units.
“That’s pretty remarkable for rural resort communities,” commissioner Liz Smith commented. “We’ve expanded that AMI range for workforce housing up to 140% just because of the need and also the cost of these projects. To be able to complete something like this where it will eventually have cash flow we can reinvest in more housing at those AMIs is not something I’ve heard other communities talk about.”
Birnie agreed. He said the county has worked on this concept for a long time, and he is hoping to apply it to the Whetstone project in the North Valley if possible.
“That’s going to be a very challenging project to finance. The cash flow is not there yet, so we’ve got to figure out that intersection and cap fees,” he said. The Whetstone project is estimated to bring in 255 units at a cost of more than $130 million, breaking ground in 2025 if all goes as planned.
Sawtooth Phase I was completed in 2023 and is now fully occupied. Assistant county manager for sustainability and operations John Cattles previously estimated that Phase 1 would generate about $250,000 in revenue annually, and that project was funded primarily by a one-time American Rescue Plan Act (ARPA) grant.
By Kendra Walker
The Mt. Crested Butte town council agreed to buy two Homestead affordable housing units to be used for town employees at the March 5 council meeting. The council was split on how they will pay for the units, and will determine how they will finance them at a later date.
Town finance director Karl Trujillo explained that the town’s housing fund is currently completely dedicated to paying for the Homestead project, including a $1.5 million to $2 million commitment toward a purchase assistance program for Homestead buyers. Trujillo presented three financing options for how the town could pay for their two units.
Option 1 is to finance the whole thing and either issue tax exempt Certificates of Participation (COP) or do a Bank Placement. However, staff did not recommend this option and recommend going with either Option 2 or 3.
Option 2 is to finance the purchase of two units which would be less than $1,000,000.
“This would be a bank placement which only takes 30 to 60 days to complete. [Brokerage and investment banking firm] Stifel would help us put out a RFP to get the best possible rate. The rate would still be a tax-exempt rate,” he said, explaining the pros of this option. For cons, the Housing Fund would be completely committed for the next three years completing the Homestead process.
Option 3 is to borrow from one of the town’s other budget funds: the General Fund, Capital Fund or Downtown Development Authority (DDA) Fund. “Financing could be done at any timeline and no interest or financing cost would be charged,” Trujillo said. However, “the General Fund would be depleted down to $1.5 million, which is only 25% of expenditures when we try to keep the balance at 50% of expenditures,” he noted of the cons. He explained that those funds are also used for emergency funds, such as with a recession or COVID. “In the past when we’ve had a recession or something like COVID, fiscally we cut out all Capital projects. Unfortunately, you have to catch up with those projects in the future and it ends up costing you more money,” he said. “Borrowing from the Capital Fund would delay future projects. The DDA will have about $4 million this year but currently is considering future projects.”
“I’m not comfortable with that option at all,” said councilmember Janet Farmer. “I like Option 2, it gives us the flexibility for something unforeseen.”
“I’m also with Option 2,” said mayor Nicholas Kempin. “We’re talking about the Housing Fund being zeroed out, but we could make these payments over time.”
“Provided our excise tax stays in place and keeps bringing in the money [for the Housing Fund],” said town manager Carlos Velado. “These numbers are based on our Housing Fund predictions.”
“I’m a little bit torn. There are alternatives,” said councilmember Steve Morris. “We still have Option 4, which could be Option 2 but raise the excise tax so we have more funds to work with.” The current excise tax that goes toward the town’s Housing Fund is 2.9%.
“That’s assuming voters are enthusiastic to do that,” said councilmember Dwayne Lehnertz. “If we have the potential to not pay interest, it makes sense to me to not pay interest.”
“I’m with you on that too, I’m just concerned about our emergency fund,” said Kempin. “We would be renting the two units we bought, so we would have a small amount to offset from rent.”
“Another option would be to not purchase units in Homestead,” said Velado. “I’m not saying that’s the option you want to take.”
“If we take those two units out of the lottery, we’re potentially reducing the ability for town staff to get those units themselves?” asked Morris.
“Not really. As the deed restriction is set up, the town staff has priority for our units,” said Velado. “We would be blocking someone else from the community out, but we do need to plan to house future employees.”
“Is committing this money to Homestead the right maneuver right now versus acquiring units in a different location in a year-and-a-half or two years?” said Morris, noting other developments coming down the pipeline that may provide affordable housing opportunities, such as the Villages at Mt. Crested Butte, Honey Rock Ridge and the Nordic Inn.
“Those are all still ideas, all speculation,” said Velado.
Kempin suggested the council take more time to ponder the financing mechanism and have further discussion.
The council voted to buy two Homestead housing units and will determine how to finance those units at a later date. The Homestead lottery is on March 15, but the transfer of money will occur 18 months later with Bywater Development.
By Kendra Walker
The Gunnison Watershed School District (GWSD) school board is considering how the district can be more involved with housing opportunities, as it looks for ways to increase its staff recruitment and retention.
Last year, the board began working with housing specialist Willa Williford to assess the housing needs of the district’s staff and to develop a high-level housing action plan outlining how the district might move forward in the affordable housing scene in the Gunnison Valley.
Superintendent Dr. Leslie Nichols explained that the plan is intended to help guide the district when approached by potential partners in the community about housing collaborations and opportunities.
Williford said the plan outlines the district’s housing goals, price points, locations, types of housing and employee needs. “That way we can say, this is what we’re looking for, and it narrows the universe of things we can talk about.”
Williford said a working group was formed in October and has met regularly to work through goals, guiding principles and tools outlined in the plan. During the February 12 school board meeting, Williford presented a draft housing plan for the board’s feedback, with the goal for more discussion and potential adoption in April.
Williford reminded the school board that the 2023 employee housing needs assessment estimated there could be a need to hire 70-80 new employees through 2028. “To house these employees, 55-70 housing units affordable to employee households are needed,” said Williford.
However, with the cost of construction outweighing affordability, “Very few employees will be able to afford housing in our market,” said Williford. “Those units would need a subsidy between $50,000 and $300,000 to be affordable to employees.”
Under the guiding principles of affordability, sustainability, diversity, education and efficiency, the plan outlines a goal of 15-20 new employee housing units in five years. “This is both aspirational and realistic,” said Williford. “We realize the need for a lot more than this.”
“Have you done an assessment of the cost to build that many units?” asked board member Mark Vanderveer, doing a quick calculation based on the cost to build per square foot.
“We’re looking at $20-27 million dollars. I just want everyone to understand that this is a multi-million-dollar endeavor,” said Vanderveer
“Funding, development partnerships and land are tools that are absolutely critical to making this happen,” said Williford. Regarding funding, she said the working group recommends reserving $1.5 million from the school district’s capital fund for housing initiatives over the next five years, exploring certificates of participation and continuing to transfer excess interest income and pilot payments from the general fund to the capital fund.
She noted several housing and development partnerships the district could utilize, including the district’s Career and Technical Education (CTE) and Student Organization Achieving Results for Community (SOAR) programs, Gunnison Valley Regional Housing Authority, Valley Housing Fund, local governments and private sector developers.
She also identified three district-owned parcels in Gunnison that have potential for housing development, including the old bus barn’s .57 acres at Ohio and 11th, 1 acre on the northwest corner parcel of Gunnison High School and about .5 acres on the southeast corner of the Gunnison Community School parcel.
Looking at the timeline and next steps, Williford explained that the housing plan is still in the outreach phase. “Right now, we’re hoping to align with your budget process for potential funding for this plan in the coming year,” she told the board. The hope is to begin strategic planning this summer and get partnerships in place next year.
The working group plans to hold two community open houses regarding the housing action plan, one on March 5 in Crested Butte and the other on March 7 in Gunnison. The district will share more details soon. Williford will then bring the plan back to the board for more discussion and potential adoption in April.
“How many employees are currently in the school district?” asked Vanderveer.
“Between 350 and 400,” said Nichols.
“I’m expressing concern that 20 units is the drop in the bucket for what the community needs,” said Vanderveer. “I would like to know more about what the county plans to do to expand housing…for the hospital, for the police, for restaurant workers, for everybody. I’d like to understand the risk of the options. It’s a sizable amount of money to get into this, and a sizable project to manage…I’m concerned about being able to meet the salary needs of everyone who works in the district, not just housing. I really need to understand more to know if getting into the housing business is the right thing to do for the school district.”
Board member Jody Coleman agreed. “I’m concerned about equity among the 300-400 employees. There are those already established in their homes who work their tails off to purchase homes and pay their mortgages. Then there’s the newer employees that may have a different landscape financially to get into a livable space. I want to be fair to every employee…but this is not going to be equitable for all employees.”
She continued, “I’m really hesitant to have the school district get into the real estate business, but I need to be educated. We have a crisis in the valley, everyone knows it, and I think we need to consider other solutions as we work together with the county and the large employers in our valley and use land that we own.”
“Every district that gets into the housing business is grappling with how to make it fair,” said Williford. She noted the GWSD employee survey responses that helped inform the district’s housing needs assessment. “Most employees were pretty sympathetic to the sentiment of ‘My job is better when you can recruit and retain people that support me, and I understand they’re in a different housing market than I was in,’” said Williford. “That’s not universal but it was a sentiment that showed through in those comments.”
“I want to make sure whatever we did, we can do it without risking operational dollars and carrying the debt,” said Vanderveer.
“I don’t see this plan as saying we plan on going into debt by building all these with our own financing,” said Nichols. “It’s driving me to get some kind of vision for what this board supports. I’m truly worried about being able to bring quality educators to the valley…the housing does not exist and so we are big enough to look at being part of that solution.”
The board supported moving forward with the discussion and will consider a draft plan for potential adoption in April.
By Kendra Walker
The Mt. Crested Butte town council reviewed a concept plan and community housing proposal for Honey Rock Ridge during their January 16 meeting. The council shared enthusiasm for the proposed 18 affordable housing units that go above and beyond the development requirement, but when asked for financial consideration they made clear the town’s community housing funds are currently all tied to the Homestead affordable housing project and financial help is uncertain at this time.
The Honey Rock Ridge project is located at 33 Marcellina Lane and includes 19 undeveloped lots. It was previously the Villas Phase V, and the new owner J 4:15 LP is proposing a three-phase major alteration development. General partner Nathan Sheets shared an updated community housing proposal with the council.
The community housing requirement triggered by the development is 6.55 units; however, Honey Rock Ridge would like to build a total of 18 deed-restricted affordable housing units on the property. Sheets explained that the plan proposes an on-site development of an 18-unit multifamily lodge with 24 total bedrooms, but they are looking for financial assistance from the town and the Downtown Development Authority (DDA).
“There is a lot of financial consideration and cost burden we would bear without help from the town,” said Sheets. “As we have the ability to build a total of 18 units, we would like to present an opportunity for the town to participate in helping us do so.”
He presented three different subsidy request options: option one being a $5 million subsidy from the town and/or DDA for 18 deed restricted units, option two being a $3 million contribution for 12 deed-restricted units with six remaining free-market units, and option three as a $1 million subsidy for seven deed restricted units with 11 remaining free market units.
The proposed 18-unit lodge would also require additional considerations or waivers from the town, including a PUD amendment to increase the density, increase to the height requirement, reduction of the parking space requirement to 1.8 spaces per unit, several lot replats and the construction of an HOA building within the right-of-way and snow storage area.
Mt. Crested Butte town manager Carlos Velado reminded the council that the town’s community housing fund is pretty committed to the Homestead affordable housing project over the next several years. As of the beginning of 2024, the town has a housing fund balance of $2,062,164. The town’s 2024 budget anticipates $1,498,000 in revenues and $3,328,000 in expenditures. Earlier in January, the council approved a Homestead development contract with Bywater, LLC, and agreed to set a budget range of $1.5 to $2 million for a purchase assistance program for Homestead contract holders.
However, the Honey Rock Ridge property is within the DDA boundary, and the development could apply for DDA funds. “I would encourage the applicant to approach the DDA first,” said Velado. “As of right now all our housing funds for the next two to three years are committed to Homestead.”
Sheets said the community housing construction would begin first this spring, with the goal to completion in mid to late 2025.
“We are seeking to commence construction as soon as we are able in 2024 after snow melt, which necessitates a tight timeline,” said Sheets. “The goal is to go above and beyond and get this done first. But I can’t go to the DDA with a concept that the town council is not enthusiastic about,” he said.
“Our current housing budget has a limitation, but it’s potentially something that could be overcome or worked out, especially if the DDA were willing to cover some or all of it,” said mayor Nicholas Kempin. “I’m enthusiastic about what you’re trying to do. The key things are that you’re building it in the neighborhood and your willingness to go above and beyond. All those things for me make me want to try to work out financing to see if there’s something we can work out.”
The rest of the council agreed. “This is sort of another style of housing we’re adding into the mix,” said councilmember Alec Lindeman. “An important consideration is that Homestead is not asking for its money in one lump sum. The idea that we can’t use all our money is not entirely the case.”
“Timing could be a significant function of our ability to explore that,” said Kempin. “I think the town is enthusiastic about your proposal. I think it’s very much in the conversation, especially if the DDA could also contribute and reduce that burden on our town and housing fund. You can take that to the DDA and tell them we said that.”
The Honey Rock Ridge team said they are working on scheduling a meeting with the DDA.
By Kendra Walker
The town of Mt. Crested Butte is working with Pearls Management, LLC (Pearls) to negotiate a new development agreement for a revised Nordic Inn planned unit development (PUD) application. In exchange for town-owned property, Pearls will provide community housing as part of the Nordic Inn redevelopment. During their January 2 meeting, the Mt. Crested Butte town council reviewed the proposed agreement and will continue the discussion at the next council meeting.
The Nordic Inn, which has gone through several proposed iterations for a major alteration PUD, has a new proposal that would give the existing building a makeover and add cottage-style lodging to the property. The PUD consists of lots NI-1, NI-2 and ROS-1. However, the town owns the ROS-1 parcel, and parking and affordable housing obligations from the previous agreement still need to be worked out.
Over the past several months, town manager Carlos Velado and town attorneys Nick Klein and Jerry Dahl have worked with Pearls attorney Aaron Huckstep to finalize the development agreement. The agreement proposes that Pearls provide eight community housing units in the development, four of which will be constructed on the town-owned ROS-1 property.
“These units are to be designed and constructed at the sole expense of Pearls and be conveyed to the Town for ownership. The other four units are to be incorporated into the redevelopment of the existing Nordic Inn,” Velado said in a memo to the council. The agreement also requires that the town’s community housing units be constructed at the same time as the rest of the development. In the event construction does not commence before the three-year expiration of the PUD, Pearls shall pay the town $1.05 million.
Nordic Inn PUD history
The first Nordic Inn PUD application for a 125-room hotel with 140 public parking spaces and five community housing units was approved in 2018; however, this approval is no longer valid. The town purchased the ROS-1 and NI-2 lots from Pearls for $1,050,000 with the intent to construct a surface parking lot as part of the PUD.
Then in 2020, the first alteration of the PUD was approved for a 132-room hotel, 75-space public underground parking lot, and eight community housing units. Under this approval, Pearls is required to provide $1 million of value to the town for construction of the public parking facility for receiving NI-2 back from the town, and the town is required to contribute an additional $1 million for construction that was otherwise to be used for construction of the surface lot. The town-owned ROS-1 lot remains open space.
Presently, a revised PUD application has been submitted to the town for review, which consists of 35 accommodation units including 27 detached cottages, no public parking and six community housing units. The application contemplates Pearls retaining ownership of NI-2 and receiving the title to ROS-1, which is planned to be used as a parking lot for the proposed development.
The drafted agreement that the council reviewed on January 2 proposes that Pearls provide eight community housing units in the development, with four of those on the ROS-1 property.
Council discussion
Velado summarized the agreement: “Pearls was supposed to compensate us for the $1.05 million. That didn’t happen because of where the PUD went. These housing units replace that payment. That is what we get for contributing NI-2 to the project.”
“Originally the town was going to get a public parking garage. Things have changed and now the value is the four town-owned units,” agreed Dahl.
“Is everyone content with what’s being offered here?” asked councilmember Steve Morris. “It’s not a super exciting solution to the affordable units that I envisioned. I want to feel like this is a fair partnership. We want to do what’s best for the residents and town that will own those assets.”
Morris suggested the affordable units be two-bedrooms with 1.5 baths. “It’s very likely you’re going to have roommate situations, not necessarily couples,” he said. “I’m just looking at the challenges that come from that sort of thing. For me I just think the quality of living with an extra half bath is important to our long-term asset.”
“I agree that a two-bedroom, 1.5-bath unit is much more desirable than a two-bed, one-bath,” said councilmember Dwayne Lehnertz.
“I think it’s an important piece to the design of the affordable units,” agreed councilmember Janet Farmer.
“I can’t speak for my client. This is a brand new issue. I can’t respond to it at this time,” said Huckstep.
He further explained, “It’s not as simple as adding a half bath…These drawings are fitted to a particular footprint (architect) Gary Hartman was working on. That footprint drove the conversations to the size of ROS-1. I would have to bring it back to Gary, figure out if we have to change the footprint of the structure. It has a cascade effect. This client and Pearls have been very responsive to the town’s desires…but we need time to really digest what you’re asking for.”
The council proposed continuing the discussion to the January 16 meeting so that Huckstep could discuss the “half bath” proposal with his client.
Councilmember Roman Kolodziej also requested to include language that if the project doesn’t happen, the town receives its money with a good faith adjustment for inflation. However, no other council members felt strongly about that issue for staff to pursue.
Councilmember Michael Bacani voted against continuing the discussion, as he was in favor of coming to an agreement as soon as possible.
“We could approve this thing right now and hit the ground running. Yet, we’re punting it,” he said. “For people to say affordable housing is a big deal, well, let’s prove it.”
“I agree, there’s this tension of ‘we’ve got to get the affordable housing up right now because it’s so time sensitive,’ and it’s also got to be right,” reasoned mayor Nicholas Kempin. “I struggle with that. We’ve got to do it now, but what do we get with that?”
“The folks that will need it the most will ask ‘why did you delay on this?’” said Bacani.
Still, the council will continue the Nordic Inn redevelopment discussion at their January 16 meeting.
The Crested Butte News Serving the Gunnison Valley since 1999
